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An investigative consultant / journalist with extensive experience in forensic investigation focusing on financial fraud. Has uncovered high profile fraud cases against companies and individuals throughout Europe, Canada and Asian Pacific Region. For dislcosure, I am using the alias Arthur Big... More
  • Hit Piece Authors Prove Your Innocence 20 comments
    Jun 1, 2011 7:02 AM

    Hit Piece authors have taken a turn for the worse.  They have shown no concern for the law and no concern for the harm they are causing to the average citizen. The front running and timing of these market moving hit pieces are a frequent occurrence in today's markets and are driven purely by greed by those with no qualm about operating within the scope of the law. 

    To discuss such activity we will be drafting a five piece article that we plan to publish with a major news agency in the very near future.

    We will focus on three things:
    1) The need for transparency.  These hit piece authors want transparency so do the average citizens investing in the markets.  Each hit piece "research" author should have to sign a disclaimer with proof of identity saying they are not trading within 30 days pre and post such issuance of an article.  (i.e. We have requested this information from Waterstone Retail and Aaron Stackhouse the latest of hit piece authors - we will discuss this in the article as its very interesting to see the latest developments).

    2) The need for verification.  These authors claim they are helping investors then it should be that they can not put a research report with 15 items in the report without at least questioning management prior to such release as often 14 of the items appear to be pure interpretation or easily explainable issues.  If there is an issue with the company and the company will not address themselves than the authors should feel free to discuss publicly, but if material they should know its illegal to trade on it.

    3) The use of front running and definition of market moving research.  We believe everyone needs an education on such information.  We plan to discuss this in detail in the article and point out how firms like Kerrisdale, Waterstone, and so on continually violate the law. 

    We look forward to furthering our research on the topics and will be reaching out to such firms for quotes and comments prior to the article being published.

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Comments (37)
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  • For example now........the hit peace of SkyPeople Fruit Juice (SPU).

     

    Volume on May 31 was huge, very huge..................... front running before the hit peace release.
    1 Jun 2011, 10:06 AM Reply Like
  • I like Muddy Waters. Their hit pieces are very thorough and they take their time. 3 companies in 1 month? No, MW takes 3 months per company to investigate.

     

    Most hit piece authors are going for the fast profits, Muddy Waters too, but Muddy Waters leads to sustained results. They really clean up the place. RINO, CCME, DGW are gone, which will protect future investors.
    1 Jun 2011, 01:10 PM Reply Like
  • You've got to judge them by the results.

     

    Carson is a big-time sniper- high kill rate.
    Little has some kills.
    Left has a few kills.

     

    Weak firms like dickRo, Absaroka, The Forensic Factor, J&J have a weak kill rate. Ignore these minor leaguers.

     

    Follow the big players who are getting it done.
    1 Jun 2011, 07:08 PM Reply Like
  • Author’s reply » We believe they all front run market moving reports, which is against the law. Muddy waters to date seems to atleast speak to management teams before hand, which we believe atleast attempts to follow the law.

     

    We will be doing a feature on Absaroka and Waterstone Retail shortly.
    1 Jun 2011, 08:26 PM Reply Like
  • Just saying, I'm not even sure if it's illegal. Citron has apparently been frontrunning for years and has attacked over 200 companies. He's still not in jail. if that means something then I doubt other hit piece authors will be punished.
    2 Jun 2011, 03:19 AM Reply Like
  • Author’s reply » Doesn't mean it is not illegal? people got away with pump and dump for years. Look at Jordan Belfort.
    2 Jun 2011, 07:02 AM Reply Like
  • Is he the one who was sanctioned by the SEC around 2000?
    28 Jun 2011, 05:18 PM Reply Like
  • Arthur_Big,
    They may be frontrunning & it may be against the law... but if nobody is enforcing, who cares?

     

    This is the wild west. You are telling me we need a policeman. OK. Theoretically, that's great... but we know the SEC isn't doing anything (and they should never have allowed China companies to list in the here in the first place, without the ability to punish).

     

    I'm telling you investors don't believe the SEC policeman is going to come, and today we investors are concerned about making money in the absence of a policeman.

     

    Plus, w/ their returns, their funds are getting bigger and bigger... and they are going to be pounding this stuff down more and more.

     

    So I'm going to make money by listening to them, not you. Just the way it is.
    1 Jun 2011, 08:57 PM Reply Like
  • Author’s reply » I am not in any way providing you any avenue to make money. I am purely saying what they are doing is illegal and I can guarantee you that the SEC and authorities are listening. Just wait, its going to get really interesting really fast.
    2 Jun 2011, 07:04 AM Reply Like
  • I don't understand, if the SEC and authorities are listening now, why aren't they doing anything? Furthermore Citron has been doing this for years, the SEC didn't do much but according to you is gonna change ways and start doing stuff. So you say Citron has been doing illegal stuff for years and that was okay? Do you have insider information we don't have?

     

    I think it's just more likely what they are doing is not illegal from the information I have.
    2 Jun 2011, 07:43 AM Reply Like
  • Author’s reply » Jons - that's a bit amusing. So you are saying because someone gets away with breaking the law for years it must be ok? Really?

     

    How about:
    - Jordan Belfort
    - Madoff
    - Stanford
    - Enron

     

    Did they all get caught their first year in business?

     

    The law is the law and it catches up to people, sometimes it takes a bit of time, but when they strike they typically do it all at once. How do you think all these ponzi schemes went down at the same time. They build their case and they strike all at the same time. This way they don't let someone slip through the cracks. I can assure you from interactions i have had they are very actively monitoring.

     

    Just wait it will be a fun situation to watch by those on the sidelines.

     

    Have a rejoiceful day.

     

    AB
    2 Jun 2011, 09:38 AM Reply Like
  • Author’s reply » Furthermore I thought I would add - if you are ok following someone that is breaking the law to profit at the expense of others that is your prerogative. If you ethically do not care that the money you are making is do to illegal tactics then good luck living with yourself.

     

    Given i started reporting on this situation because a friend referred me to it. I was appalled by the shear audacity of these hit piece authors that only care about one thing - greed and money. The don't care what law they break, they don't care what person they hurt. They will cheat lie and steal purely to make a dollar. They will tell you their stories, but if they cared they wouldn't be doing it.

     

    These hit piece authors like Glaucus (there is a reason he doesn't give his identity as his credibility is shot - will explain further in my instablog), geoinvesting are all criminals trying to profit at the expense of others regardless if it is illegal or unethical.
    2 Jun 2011, 07:17 AM Reply Like
  • Arthur: I do not understand your logic at all. What is wrong with taking a position in a company and then releasing an accurate research report or a presentation on that company? If that were illegal, you would have to shut down the Ira Sohn conference. You would have to shut down sites like Value Investors and SumZero. In fact, you would have to shut down every investment blog where someone writes up a stock they have a position in. There is nothing to prove that the author knows the report will move the stock. If the research is poorly done and shallow the stock will not move. The stocks move because the research released is incredibly detailed and well thought out. They move more these days because certain authors have proven to have a track record of accuracy in their reports. By accuracy, I mean talking about companies which are then proven to be frauds. Longtop was not halted because of Citron. It was halted because they committed fraud. CCME and Rino were not delisted because of Muddy Waters. They were delisted because they committed fraud. There is absolutely nothing wrong with doing research on a company, taking a position, and then releasing the findings as long as the reports are factual and as far as I can tell, the reports to date have proven to be very factual. I base that on the number of stocks which have been halted or delisted. What is fraudulent is purposely releasing inaccurate information in order to manipulate a stock. However, given how many stocks have been halted and delisted, I think it is fair to say that the reports being issued are quite accurate. Finally, I would argue more harm is done by people like Glen Bradford or Ping Luo who write up articles and reports that praise or defend a company which turns out to be frauds. I actually wonder why you are not intent on going after people like that and seem more intent on going after people whose reports have proven to be factual.
    10 Jun 2011, 08:07 PM Reply Like
  • Author’s reply » Because of 90% of the information these individuals are writing in their reports are false and disproved. I am not speaking about the ones on the ground that understand real due diligence. Those individuals are just trading on privileged material information.

     

    The individuals I have outlined below and reported to the SEC are using the negative hype in the market to profit. Your defense above is crazy as I could post just in a header that a company is of low integrity and the stock would drop immediately. The latest case I am following this was done. Lets see what the SEC and authorities think - how about that? A small fraction of my correspondence below.

     

    ----------------------...

     

    www.sec.gov/news/press...

     

    ----------------------...

     

    The following information on our site needs to be investigated.

     

    hitpieceresearch.com

     

    These individuals are using naked short selling tactics to profit off inside information and unproven (and later disproved) allegations.

     

    Unregulated "Research" Firms such as:

     

    Kerrisdale Capital
    Glaucus Research Group
    Alfred Little
    Geoinvesting.com
    Absaroka Capital

     

    And individuals such as:

     

    Richard X Roe (on seeking alpha)
    Rick Pierson (on the street.com)

     

    Are all using naked short selling and front running reports that intend to move the market to profit at the expense of the average shareholder.

     

    The companies they have employed naked short selling tactics, then wrote reports that contained allegations that were easily disproved by the companies. Yet the damage was done. The securities fell, by at times, greater than 30% in value despite the allegations being disproved by the company.

     

    We believe naked short selling techniques and the use of manipulative "research" reports by unregulated firms should be investigated for the good of the American people, the global market place and the integrity of the markets.

     

    They won't stop until this is taken serious. They are not intending to help uncover fraudulent activities. They are using the buzz of the 14 out 600 companies that have been halted to manipulate other securities.

     

    We believe all integrity and rules of the market are being destroyed due to lack of enforcement.
    11 Jun 2011, 08:22 AM Reply Like
  • Arthur: I guess I just don't see the difference of Muddy Waters writing a report that shows a stock to be fraudulent and Einhorn presenting on St. Joe at the Ira Sohn conference. I can obviously understand why it is illegal to spread rumors that are untrue about a company, but given that numerous write-ups have uncovered fraud (CCME, LFT, RINO, CAGC) I think preventing of writing factual reports will allow the frauds to continue. That being said, if someone writes a report that is proven to be a bunch of lies to manipulate a stock, I do think that person should face severe consequences.
    11 Jun 2011, 08:46 AM Reply Like
  • Author’s reply » Even if they break the law and front run and trade on inside information?

     

    What about all the others creattng manipulative information such as Rick Pearson on YONG and Absoroka on YONG, which I have heard Morgan Stanley has viewed as credible. Or all the others that post 60 points to a hit piece article and 59 are easily explainable? Purely intending to profit from stock loss versus getting answers.
    12 Jun 2011, 05:10 PM Reply Like
  • What is the inside information that they are trading on? Is the inside information the fact that the report will be coming out? If so, then what is the difference between trading before the report being released and Einhorn trading before giving a presentation that will likely move the stock he is presenting on? Those who present a stock at the Ira Sohn conference, must know that the presentation will move the stock if for no other reason than history says it will. Look what happened to the for-profit education companies when Eisman put his presentation out or what happened to JOE when Einhorn presented. I did not hear people being critical of these two men for having a position in the security they presented on.

     

    I will not defend those who purposely lie about a stock to make a profit. If it is proven that a report was written that the authors knew was not factual and they only wrote the report because they knew they could profit from it, then I say prosecute them. However, I am not going to call for the prosecution of someone who puts months of research and comes out with facts that prove to be true because they traded on their own report. It is their work and research and they have the right to both trade on the information and release the report. The moment we stop allowing these reports to be written and published is the moment that those who run these scams want because it means the truth is not getting to the public. As I have said in the past, the reports that came out did not halt and eventually delist names like CCME and CAGC. It was the fraud that was being committed which caused that. The reports just alerted investors to the facts of what was going on.
    12 Jun 2011, 08:06 PM Reply Like
  • Author’s reply » Valueinvestor - go through and read my comments. I have made it very clear what is manipulation and what is insider trading. You will see what I state is both and I have provided concrete proof to the authorities regarding both.
    13 Jun 2011, 07:10 AM Reply Like
  • Arthur_Big writes: "Just wait though as there is a reason they declined to comment further. Trust me it won't just be MW they go after though."

     

    Mr. Arthur Big,
    Pardon my healthy skepticism (because your comment above implies that you have direct knowledge of an imminent WSJ-front-page- super-scandal multi-billion$ Sino-Forest, DGW, Al_Little, MW SEC super takedown)... but how long do we wait?
    Respectfully, BBB
    24 Jun 2011, 02:53 AM Reply Like
  • It does appear that Alfred's idea of insider trading is doing serious due dilligence, trading based on what you find, and then releasing your opinion to people. As I have said in the past, if this were illegal then anyone who presents at the Ira Sohn conference or writes up an idea on an investing blog would be committing a crime. Personally, I believe much more damage is done by firms like Roth, Global Hunter, and RedChip who have seemingly been tricked by these frauds (I say seemingly because I am not 100% convinced they are not complicit in the fraud) than by Muddy Waters, Harbin, Alfred_Little. Many fraudulent firms and those who help promote them have had their party broken up by the likes of MW, Citron, and Alfred_Little. I only hope that these places continue to do well thought out research that exposes these frauds so retail investors do not become vicitims of them.

     

    Let me just add that as always, I feel those who knowingly manipulate stocks by making false statements, allegations, or spread rumors should be prosecuted to the fullest extent of the law.
    25 Jun 2011, 06:30 PM Reply Like
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  • Does anyone have an opinion on timing of hit pieces? I have been following a new trend and believe they are very interesting given timing.
    Jun 8, 2011
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